Insurance Plans 916 views July 10, 2019

Kotak E-Term Insurance Plan

Kotak Life E-Term Insurance Plan

There is no point in buying term insurance if it does not serve to secure the future of your loved ones. Kotak Life Insurance Company realizes how interested customers are more inclined to buy a term insurance plan that extends a large cover and ensures added benefits in lieu of nominal premium charges and, hence, came out with its own version of the e-Term plan. Designed keeping in mind the varying need of its customers, this pure protection term insurance plan ensures maximum protection like no other. The company favors healthy habits and respects a woman’s contribution to the household. This explains why it charges low premiums from non-smokers and women.

As evident from the name itself, this plan is available online and can be bought either from the company’s website or the portal of any insurance web aggregator involved in selling term insurance policies. Interested customers while filling in details online will be required to submit the following documents including:-

– Proof of Identity including PAN Card, Passport or Driving License

– Address Proof including documents like Aadhaar Card, Passport or Driving License

– Income Proof including documents like a copy of the latest ITR filed and submitted or Form 16 or copies of the salary slips received over the last three months.

The minimum amount of sum assured one can opt for is Rs 25 lakhs while the maximum death benefits is subject to the underwriting terms and conditions.

Key Features of Kotak E-Term Plan

More cover at low prices

What if someone told you that you can continue to protect your family by spending just Rs 9 each day. At a price much lesser than what you pay for a cup of coffee, investing in Kotak e-Term insurance ensures that your family continues to stay financially protected in the event of your sudden death. The death benefits predetermined at the time of policy inception help your family to continue enjoying the same lifestyle even in your unfortunate absence.

Multiple plan options

Life is all about making the right choices. Right from marrying our choice of partner to living in a home of our choice, it helps when we are given options to choose from. The same stands true for term insurance too. Kotak Life Insurance Company allows its customers to choose from Life, Life Plus and Life Secure options, thus, allowing customers to choose as per their need.

-Life Option

The full amount of the sum assured shall be payable on the death of the life insured.

-Life Plus Option

The full amount of the sum assured shall be payable on accidental death over and above the predetermined amount of death benefits subject to a maximum amount of Rs 1 crore.

-Life Secure Option

Total or permanent disability due to accident or illness makes it difficult for the customers to continue paying premiums towards the term plans they buy. Choosing this option relieves the customers from having to pay premiums in the event of permanent disability. However, the policy will continue to be in force despite premium waivers. The death benefits will be handed over to the nominee in the event of the sudden death of the insured.

Death payout options

Most life insurance companies in India pay in a lump sum the total amount of sum assured on the sudden death of the insured. The term plan terminates after payment of the death benefits. This is called “Immediate Payout” and is available to Kotak e-Term plan customers too.

– Level Recurring Payout

Not the entire amount of the sum assured is given away to the nominee at one go. In this option, the nominee will be handed over 10 percent of the sum assured as immediate payout on the death of the insured. Post that, six percent of the sum assured is handed over to the nominee each year for a period of 15 years.

Increasing Recurring Payout

Payout equivalent to 10 percent of the sum assured is paid to the nominee on the death of the insured. Post this immediate claim settlement process, six percent of the total sum assured shall be paid at the end of the first year. The payout will increase by 10 percent, thereafter. These installments shall be paid at the end of each year for the next 15 years.

Step Down Options

The idea of buying term insurance during your early years may not commensurate with the requirements of your dependents later. It is possible that your current assets may be sufficiently liquid enough to retain their lifestyle or ensure that all your loans are paid off. In such a scenario, you may prefer to leave behind a reduced amount of sum assured in lieu of lower premium charges. Customers Buy Kotak E-Term Insurance Plan may choose this option, thereby, lowering the amount of sum assured already chosen.

Premium Payment Options

Depending on convenience and budgetary requirements, customers may choose to pay premiums monthly, yearly or only once.

Tax Benefits

Dual tax benefits on premium charges and death benefits can be availed by customers under Sections 80C and 10(10D) of the Income Tax Act 1961. However, this is subject to the governing laws during that period.

Premium Paying Term

Like most other term insurance plans sold in India, the premium paying term of this plan is equal to the policy period. However, those looking for limited premium paying terms can opt for limited paying terms equal to five or 10 years. The single premium payment option is also available for customers looking to pay only once towards their term insurance policies.

– Policyholders opting for 10-40 year policy period may choose to pay limited premiums for five years.

– Policyholders opting for 15-40 year policy period may choose to pay limited premiums for only 10 years. 

Add-on Rider Benefits

Enhanced protection over and above promised by level term insurance is possible with add-on riders including:-

Critical Illness Plus Benefit Rider

A sudden diagnosis of chronic disorders or need for surgery can result in immense expenditure. Choosing to pay extra for this rider ensures that the insurance company pays in a lump sum the predetermined sum assured in the event of diagnosis of any disorder mentioned in the list of 36 critical illnesses. However, this is allowed only once during the policy period as the rider terminates on payment of the rider benefit to the insured. This rider benefit is over and above the basic sum assured as decided while buying the term policy.

However, there are certain conditions for availing this benefit. These include:

– The policy must be in force for at least 90 days from the date on which it was first issued

– The rider benefit would be paid by the insurance company only if the insured has survived for at least 30 days after being detected with the critical illness.

Also, the insured has to intimate the insurance company in writing of the same within 30 days of the critical illness diagnosis along with the following details:-

  1. Date on which the critical illness was first diagnosed;
  2. Nature and extent of illness including reports from the hospital and doctor’s prescriptions;
  3. The insured may have to undergo a medical examination by the medical examiner appointed by the company before availing the benefit.

Kotak e-Accidental Death Benefit Rider

Deaths due to accidents are common. This explains the growing importance of paying for the additional rider that mandates the insurance company to pay an accidental death benefit equal to the death benefits promised in the basic term insurance policy. 

Non-payment of premiums

At times, the insured is unable to pay premiums as required on the due date. The insurance company then allows a limited timeframe of 30 days from the due date of unpaid premium charges. This remains the same for all policyholders paying premiums, be it monthly or yearly.

Death Benefits Calculation

The death benefits on payment of regular premiums may vary from that of single premium payments.

Pursuant to regular and limited premium paying policies, the death benefits that will be handed over to the nominee of the insured is the higher of the following three amounts:

  1. Basic Sum Assured 
  2. 10 times the yearly premium charges excluding modal factors and additional premiums (if any)
  3. 105 percent of the total premiums paid till the date of death excluding additional premium charges (if any)

However, if the insured dies within the grace period, then the sum assured is paid minus the unpaid premiums. This means that if the insured is paying premiums every month, then the outstanding premium installments for the rest of the policy period are deducted from the death benefits predetermined while buying the policy.

For policyholders who had agreed on the single premium payment mode, the death benefits are higher of the following:-

  1. Basic Sum Assured
  2. 1.25 times the Single Premium minus extra premiums (if any)

Surrender Benefit

– There is no surrender value for policies paid over the regular premium payment mode.

– Those who have opted for the limited premium payment mode may surrender the policy after paying the premiums for two or three years.

– Those have bought the policy by making a single premium payment can opt for policy surrender whenever they wish to.

Caveat About Kotak E-Term Plan Insurance Plan

– If the insured has opted for limited premium payment mode of 10 years but has not paid premiums for the first two policy years within the grace period, the policy will lapse.

– If the insured has opted for a limited premium payment mode of more than 10 years but has failed to pay premiums for the first three years within the grace period, the policy will be deemed terminated.

– The revival of a lapsed policy is possible only if the insured requests for the revival of the policy within two years from the date of first unpaid premium.

– Need for protection may decrease at any stage of the policy period. The insured may then opt for a lower amount of sum assured.

– The insurance company will refuse to recognize total disability as a permanent disability if the disability has been caused directly or indirectly due to drug or alcohol abuse, failure to adhere to medical instructions, involved in any kind of racing or athletic activities, war or riots, nuclear explosion, adventure sports, mental disability, self-injury or attempt to kill one own self.

– The term insurance is deemed null and void if the insured has committed suicide within one year of the policy inception or revival. This is irrespective of whether the insured had been in an imbalanced state of mind while committing suicide. The nominee will be handed only 80 percent of the premiums paid till the date of death.

– If the insured has committed suicide within a year of the minor revival, then the nominee will be entitled to the entire amount of death benefits promised while buying the policy.

– If the insured commits suicide within a year of the major revival, then the nominee will be handed over 80 percent of the premiums paid or surrender value, whichever is higher.